Indonesian anti-graft agency arrests head of energy regulator

JAKARTA (Reuters) - Indonesia's anti-graft agency on Wednesday arrested the head of the energy regulator to probe allegations he took more than half a million dollars from an oil firm, piling more uncertainty on energy policy in Southeast Asia's biggest economy.

The arrest is a new blow to Indonesia's attempts to attract more investment from international energy companies, several of which have threatened to scale back operations due to uncertainty about the investment environment.

The former OPEC member's oil output is declining, and the country has faced criticism for unclear regulations and complaints about a nationalist stance on resources.

Indonesia's Corruption Eradication Agency (KPK) said SKKMigas Chairman Rudi Rubiandini had been caught taking around $400,000 in a black brief case and ownership documents for a BMW motorcycle from the owner of Singapore-based Kernel Oil, Simon Tanjaya. An additional $190,000 was found in the chairman's residence, KPK spokesman Johan Budi said.

KPK said it was the biggest cash seizure by the agency in its 10-year history.

Kernel Oil officials in Singapore and Indonesia declined to comment, while Rubiandini could not be reached for comment.

The firm buys crude from Indonesia's SKKMigas and then sells it to international markets. It also supplies oil products to Indonesia.

Finance Minister Chatib Basri told Reuters that while the government was committed to zero tolerance of corruption the case did send a "bad signal to investors."
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